PSALM sells Bataan thermal plant for $2.86M


Posted at Apr 17 2009 04:24 PM | Updated as of Apr 18 2009 12:34 AM

State-run privatization agency Power Sector Assets and Liabilities Management Corp. (PSALM) has concluded negotiations for the sale of a decommissioned thermal power plant in Limay, Bataan.

In a statement, PSALM said Mindanao-based Rubenori Inc. has agreed to pay $2.86 million for the 225-megawatt Bataan thermal facility, the third decommissioned power asset sold by the government.

The sale covers structures, plant equipment, auxilliaries and accessories, except the underlying land.

PSALM said it pursued the negotiated sale after the third round of bidding for the Bataan plant last February failed because the only compliant bidder did not meet the reserve price set by the government. The facility was first auctioned off in April 2005 and later, in September of the same year.

"PSALM will declare Rubenori as the winning bidder for the Bataan plant after it has verified the accuracy, authenticity, and completeness of all the submitted bid documents," it noted.

Rubenori is primarily engaged in the trading of scrap metals locally and overseas. It maintains a strategic relationship with Japan's Sato & Co. Ltd, which has 50 years of experience in recovering and recycling iron and non-ferrous metals.

PSALM, which is tasked to bid out government's power generating assets, successfully sold two of its decommissioned plants, the 200-MW Manila thermal plant and 54-MW Cebu II, in April 2008 and January 2009, respectively.

The other decommissioned facilities slated to be auctioned off this year are the 104-MW Aplaya power plant, the 22.3-MW General Santos diesel power plant, and the 850-MW Sucat thermal power plant.

The government is banking on privatization proceeds to help plug the country's ballooning budget deficit.

Recently, it announced plans to revise this year's budget deficit target to P199.2 billion or 2.5 percent of gross domestic product (GDP), from a previous estimate of P177.2 billion or 2.2 percent of GDP.

The wider deficit is due to dwindling tax collections and accelerated government spending amid the ongoing economic crisis.